Issue: Whether the CMS policy effected by the AWestmoreland letter@ of December 3, 1999, by which home health agencies no longer are required to file claims for Medicare coverage in cases involving dually eligible beneficiaries and states are prohibited from recovering from providers which fail to submit claims, violates the Medicare and Medicaid statutes, the APA, and the due process clause.

Relief sought: Statewide class. Declaratory and injunctive relief requiring CMS to require home health agencies to submit claims for dually eligible beneficiaries and allowing states to recover from providers who fail to submit.

Status: The parties fully briefed cross-motions for summary judgment, but, before that was argued, they reached a settlement. They are now awaiting tentative court approval of that settlement. Under the terms of the settlement, the "Westmoreland letter" of December 3, 1999 would be withdrawn and CMS would explicitly recognize the right of states to seek Medicare coverage for home health services provided to dual beneficiaries whose care was paid for by Medicaid. In addition, dual beneficiaries in Connecticut (the class) would have no estate recoveries applied against them for home health care paid for by Medicaid for services received in 1998 through 2000 and for five additional years. Connecticut will receive $33.3 million from CMS (click here for further information).

After a fairness hearing, the court approved the settlement on March 31, 2003 and dismissed the claims. The offending Westmoreland Letter was rescinded and replaced a week later with a State Medicaid Directors' Letter that explicitly authorizes a state to recoup Medicaid payments from home health agencies that fail to file claims for Medicare coverage (click here for details).

Because the parties were unable to agree on an appropriate amount of attorneys fees and expenses to be paid by the Secretary, the matter was taken to binding arbitration. On October 23, 2003, the arbitrator (a former federal judge) agreed with plaintiffs that, because plaintiffs' attorneys had special expertise necessary for the case, a market rate (rather than the standard rate of $125 per hour set out in the Equal Access to Justice Act) should be paid, and awarded them fees at $300 per hour. He reduced the number of hours which they had claimed, however. Resolution of the amount of the fee payment is the final element of the settlement agreement.

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